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EM ASIA FX-Asia FX weakens on China growth concerns, U.S. yields
March 20, 2012 / 5:07 AM / 6 years ago

EM ASIA FX-Asia FX weakens on China growth concerns, U.S. yields

SINGAPORE, March 20 (Reuters) - Most emerging Asian
currencies started firmer on Tuesday but then eased as
short-terms investors cut positions on new concern about Chinese
growth and higher U.S. bond yields.	
    The regional units turned lower after BHP Billiton said it
saw China's iron ore demand growth falling to single digits,
which hit the Australian dollar.	
    Asian stocks also fell, putting pressure on the currencies
in the area.	
    "It is difficult to buy Asian currencies as the dollar is
seen staying firm with higher U.S. Treasury yields and it is a
matter of time for the euro to fall again," said a senior dealer
at a Malaysian bank in Kuala Lumpur.	
    "But I still believe Asian currencies will regain strength
in next few months and I am sitting out this period," the dealer
added.	
    Longer-dated U.S. bond yields on Monday touched a near
five-month high. Investors are likely to keep cutting bond
holdings on signs of a recovery in the U.S. economy, which will
support the dollar.	
    The strength in the dollar, along with China's move to widen
the yuan's trading band, has capped appreciation in emerging
Asian currencies.	
    For a third consecutive session, China's central bank on
Tuesday fixed the yuan's mid-point at a stronger level against
the dollar, undercutting views that Beijing may want to have a
weaker yuan to boost growth.	
     In the belief the yuan would weaken, "some offshore players
built up long dollar/Asia positions too much last week," said a
foreign bank dealer in Seoul. "Ironically, Asian currencies
could resist pressure from a firm dollar as those players need
to clear the positions." 	
    So, the regional currencies are expected to stay in the
recent ranges for the time being, the dealer added.	
    Investors are keeping an eye on speeches of Federal Reserve
Chairman Ben Bernanke later this week, but few expect him to
provide fresh factors that would break the trading ranges of
emerging Asian currencies.	
    Among Tuesday's losers, the Singapore dollar slid
as hedge funds and interbank speculators sold the city-state's
currency.	
    The South Korean won turned lower on dollar
demand from importers and custodian banks. The Malaysian ringgit
 fell on importers' hunt for dollars.	
    U.S. crude oil futures rose for a second day in a row on
Monday in New York, although they slightly fell on Tuesday in
Asia.	
    	
  CURRENCIES VS U.S. DOLLAR   	
  Change on the day at 0405 GMT	
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        83.41          83.35       -0.07
  Sing dlr        1.2581         1.2554       -0.21
  Taiwan dlr      29.511         29.532       +0.07
  Korean won     1123.30        1122.30       -0.09
  Baht             30.72          30.72       +0.00
  Peso             42.89          42.89       +0.00
  Rupiah         9155.00        9120.00       -0.38
  Rupee            50.25          50.23       -0.04
  Ringgit         3.0595         3.0545       -0.16
  Yuan            6.3191         6.3233       +0.07
 
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        83.41          76.92       -7.78
  Sing dlr        1.2581         1.2969       +3.08
  Taiwan dlr      29.511         30.290       +2.64
  Korean won     1123.30        1151.80       +2.54
  Baht             30.72          31.55       +2.70
  Peso             42.89          43.84       +2.22
  Rupiah         9155.00        9060.00       -1.04
  Rupee            50.25          53.08       +5.63
  Ringgit         3.0595         3.1685       +3.56
  Yuan            6.3191         6.2940       -0.40
 	
(Reporting by Jongwoo Cheon, Additional reporting by IFR
Markets' Catherine Tan; Editing by Richard Borsuk)	
 	
   	
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